Not every legal dispute needs to end in court. Alternative Dispute Resolution can be a solution.
ADR refers to a range of methods that help people and businesses resolve disputes without asking a judge to decide the outcome. Depending on the circumstances, ADR can help preserve relationships, reduce legal costs and achieve a practical solution that both parties are willing to accept.
In England and Wales, the courts actively encourage parties to consider ADR before commencing legal proceedings. In many cases, attempting to resolve a dispute through ADR can save significant time, expense and stress.
In England and Wales, the courts actively encourage parties to consider ADR before commencing legal proceedings. In many cases, attempting to resolve a dispute through ADR can save significant time, expense and stress.
That does not mean ADR is suitable for every dispute. Some cases require a court to determine the issues, particularly where the parties cannot agree or urgent legal action is needed. However, understanding how ADR works can help you decide whether it may be an appropriate option before taking the next step.
This guide explains what ADR is, the different forms it can take, when it may be appropriate and how it fits into the wider civil justice system.
At a Glance
Area of Law: Civil Litigation
Applies to: England and Wales
Commonly used for:
- Consumer disputes
- Builder disputes
- Breach of contract
- Debt recovery
- Neighbour disputes
- Property disputes
- Business disagreements
Examples of ADR include:
- Mediation
- Arbitration
- Ombudsman schemes
- Adjudication
- Early Neutral Evaluation
Purpose:
To help parties resolve disputes fairly without the need for a court hearing wherever possible.
What Is Alternative Dispute Resolution?
Alternative Dispute Resolution, commonly known as ADR, describes a number of different processes used to resolve disputes outside the traditional court system.
Rather than asking a judge to decide the outcome, ADR encourages the parties to work towards a resolution through an independent third party or an agreed procedure.
Depending on the type of ADR used, the outcome may be:
- agreed voluntarily by the parties;
- recommended by an independent person; or
- legally binding.
The appropriate method will depend on the nature of the dispute and the willingness of both parties to participate.
Why Does ADR Exist?
Court proceedings are not always the quickest or most effective way to resolve a disagreement.
Even relatively straightforward claims can involve:
- court fees;
- lengthy timescales;
- preparing documents;
- exchanging evidence;
- attending hearings.
ADR was developed to provide alternative ways of resolving disputes that are often:
- quicker;
- more flexible;
- less formal;
- less expensive.
In many cases, ADR allows the parties to retain greater control over the outcome rather than leaving the decision entirely to the court.
Why Do Courts Encourage ADR?
The courts recognise that many disputes can be resolved without a trial.
Encouraging parties to consider ADR can:
- reduce unnecessary litigation;
- save court resources;
- reduce legal costs;
- encourage practical solutions;
- preserve ongoing relationships where appropriate.
Judges generally expect parties to make reasonable efforts to resolve disputes before asking the court to intervene.
While ADR may not always be suitable, refusing to consider it without good reason could become relevant if the dispute later reaches court.
Is ADR the Same as Going to Court?
No.
The two processes are very different.
In court, a judge considers the evidence, applies the law and makes a legally binding decision.
With ADR, the parties usually have a greater opportunity to discuss the issues and explore possible solutions themselves.
Some forms of ADR produce binding outcomes, while others simply assist the parties in reaching an agreement.
The level of formality depends on the particular process being used.
Is ADR Compulsory?
Not always.
Whether ADR is appropriate will depend on the nature of the dispute and the circumstances of the case.
In many civil disputes, parties are expected to consider ADR before commencing proceedings.
Courts increasingly encourage its use because it can often resolve disputes more efficiently than litigation.
However, there are situations where ADR may not be appropriate, for example where:
- urgent court orders are required;
- one party refuses to participate meaningfully;
- there are complex legal issues that require judicial determination;
- there is a significant imbalance that makes negotiation impractical.
Each case should be considered on its own facts.
What Are the Advantages of ADR?
ADR offers several potential benefits.
It Can Be Quicker
Court proceedings may take several months, and in some cases considerably longer.
Many ADR processes can be arranged much sooner.
This may allow disputes to be resolved before positions become more entrenched.
It May Cost Less
Although some forms of ADR involve fees, they may still be less expensive than fully contested court proceedings.
Reducing legal costs is often one of the main reasons parties agree to explore ADR.
It Is Usually Less Formal
Many people find the court process intimidating.
ADR often provides a more relaxed environment in which discussions can take place.
This can make it easier for both parties to explain their concerns and explore possible solutions.
It Can Preserve Relationships
Some disputes arise between people who will continue to deal with one another after the disagreement has ended.
For example:
- neighbours;
- business partners;
- contractors;
- suppliers;
- landlords and tenants.
Resolving disputes cooperatively may help preserve those relationships.
It Encourages Practical Solutions
A judge is generally limited to the legal remedies available under the law.
During ADR, the parties may agree to more flexible arrangements, such as:
- staged payments;
- replacement goods;
- additional work;
- future services;
- revised contractual arrangements.
This flexibility can make ADR particularly attractive in commercial and consumer disputes.
Are There Any Disadvantages?
ADR is not suitable for every situation.
Possible disadvantages include:
- it may not succeed;
- both parties usually need to engage constructively;
- some processes involve additional costs;
- delays may occur if one party uses ADR simply to postpone proceedings.
Where ADR does not resolve the dispute, court proceedings may still become necessary.
However, the discussions and information exchanged during ADR often help clarify the issues that remain in dispute.
When Should You Consider ADR?
ADR is usually worth considering once:
- the nature of the dispute is clear;
- both parties understand each other’s position;
- relevant evidence has been gathered;
- informal discussions have failed;
- a formal complaint has not resolved the matter.
In many disputes, ADR is considered after a Letter Before Claim has been sent but before court proceedings are issued.
It can also be used after proceedings have begun if both parties believe settlement remains possible.
Does ADR Mean You Are Giving In?
Absolutely not.
Some people worry that agreeing to ADR makes their case appear weak.
In reality, the opposite is often true.
Being willing to consider reasonable settlement options demonstrates that you are approaching the dispute constructively.
It shows that your objective is to resolve the disagreement fairly rather than pursue litigation unnecessarily.
Courts generally view this positively.
What Happens if ADR Does Not Resolve the Dispute?
Not every attempt at ADR will succeed.
If the parties cannot reach an agreement, they may still be able to:
- continue negotiating;
- exchange further evidence;
- send additional correspondence;
- commence court proceedings where appropriate.
Attempting ADR does not usually prevent you from pursuing your legal rights if settlement cannot be achieved.
Types of Alternative Dispute Resolution
Alternative Dispute Resolution is not a single process.
Instead, it describes several different methods of resolving disputes without asking a judge to decide the outcome.
Each method has its own purpose, advantages and procedures.
Choosing the most appropriate form of ADR depends on factors such as:
- the nature of the dispute;
- the relationship between the parties;
- the complexity of the issues;
- the value of the claim;
- whether both parties are willing to participate.
The most common forms of ADR are explained below.
Mediation
Mediation is one of the most widely used forms of Alternative Dispute Resolution.
It involves an independent third person, known as a mediator, who helps the parties discuss their dispute and explore possible solutions.
The mediator does not decide who is right or wrong.
Instead, their role is to:
- encourage constructive discussion;
- identify the issues in dispute;
- help the parties understand each other’s position;
- explore possible compromises.
The outcome remains under the control of the parties themselves.
How Does Mediation Work?
Although every mediation is different, the process usually follows a similar pattern.
The mediator:
- explains the process;
- allows each party to explain their position;
- discusses the issues separately and together where appropriate;
- helps identify possible areas of agreement;
- assists the parties in negotiating a settlement.
Some mediations take place in person, while others are conducted by telephone or video conference.
Many disputes are resolved within a single day.
Is Mediation Legally Binding?
The mediation process itself is not usually binding.
However, if the parties reach an agreement and record it in writing, that agreement may become legally binding depending on its terms and the circumstances.
If no agreement is reached, the parties remain free to continue negotiations or pursue court proceedings where appropriate.
When Is Mediation Suitable?
Mediation is commonly used for:
- consumer disputes;
- neighbour disagreements;
- builder disputes;
- breach of contract claims;
- property disputes;
- commercial disagreements.
It is particularly useful where the parties wish to preserve an ongoing relationship.
Arbitration
Arbitration is another form of ADR, but it differs significantly from mediation.
Instead of helping the parties negotiate, an independent arbitrator considers the evidence and makes a decision.
In many cases, that decision is legally binding.
Arbitration is often described as a private alternative to court proceedings.
How Does Arbitration Work?
The parties usually agree:
- who the arbitrator will be;
- what issues will be decided;
- the procedure to be followed.
The arbitrator considers the evidence presented by both sides before reaching a decision.
Depending on the agreement between the parties, the decision may have the same practical effect as a court judgment.
When Is Arbitration Used?
Arbitration is commonly found in:
- commercial contracts;
- construction disputes;
- international business agreements;
- specialist industry disputes.
Some contracts contain arbitration clauses requiring disputes to be resolved in this way.
Ombudsman Schemes
Many industries operate independent ombudsman services.
These schemes investigate complaints between consumers and participating organisations.
Examples include sectors such as:
- financial services;
- energy;
- telecommunications;
- housing;
- insurance.
The ombudsman considers the evidence provided by both parties before reaching a decision in accordance with the relevant scheme rules.
For many consumer disputes, using an ombudsman can be quicker and less formal than commencing court proceedings.
When Should You Use an Ombudsman?
You will normally need to complain directly to the business first.
If the complaint cannot be resolved, the matter may then be referred to the relevant ombudsman scheme, provided the business falls within its jurisdiction.
Not every business belongs to an ombudsman scheme, so it is worth checking whether one is available.
Adjudication
Adjudication is most commonly associated with construction and engineering disputes.
It provides a relatively quick method of obtaining an independent decision during the course of a project.
An adjudicator reviews the evidence and reaches a decision within a relatively short period.
This can help keep projects moving while allowing more detailed issues to be considered later if necessary.
Early Neutral Evaluation
Early Neutral Evaluation involves an independent expert reviewing the dispute and providing an impartial opinion on its strengths and weaknesses.
The evaluator does not decide the case.
Instead, they offer an objective assessment that may help the parties:
- understand the legal issues;
- reassess their position;
- negotiate a settlement.
This process is particularly useful where both parties have very different views about the likely outcome of litigation.
Negotiation
Although it is often overlooked, negotiation is itself one of the most common ways of resolving disputes.
It simply involves the parties discussing the issues and attempting to reach agreement without involving the court.
Negotiation may take place:
- before a complaint;
- after a complaint;
- following a Letter Before Claim;
- during ADR;
- after court proceedings have begun.
Many disputes are resolved through sensible negotiation at one of these stages.
Which Type of ADR Is Right for Your Dispute?
There is no single answer.
The most appropriate method depends on the circumstances.
For example:
Consumer Disputes
Often suitable for:
- negotiation;
- mediation;
- ombudsman schemes.
Builder Disputes
May benefit from:
- mediation;
- adjudication (in some circumstances);
- negotiation.
Neighbour Disputes
Frequently suited to:
- mediation;
- negotiation.
Preserving relationships is often an important consideration.
Commercial Contract Disputes
May involve:
- mediation;
- arbitration;
- negotiation.
The terms of the contract may also influence which process is available.
Can You Use More Than One Type of ADR?
Yes.
ADR processes are not mutually exclusive.
For example, parties might:
- negotiate directly;
- attempt mediation;
- obtain an expert opinion;
- continue negotiations;
- commence court proceedings only if settlement remains impossible.
The aim is always to resolve the dispute at the earliest appropriate stage.
Does ADR Replace Court Proceedings?
Not necessarily.
ADR should not be viewed as an alternative that permanently replaces the courts.
Instead, it provides an opportunity to resolve disputes before judicial intervention becomes necessary.
If ADR succeeds, court proceedings may never be required.
If it does not, the parties generally remain free to pursue their legal rights through the courts where appropriate.
Choosing the Right Approach
Before deciding which ADR process to use, consider:
- the value of the dispute;
- the complexity of the issues;
- whether an ongoing relationship exists;
- the likely costs involved;
- how quickly a resolution is needed;
- whether both parties are willing to engage.
There is rarely a perfect solution for every dispute.
Choosing the most appropriate process often depends on balancing these factors against the circumstances of the case.
When Should You Consider ADR?
There is no fixed stage at which Alternative Dispute Resolution must be used.
However, it is generally worth considering once:
- the dispute has been clearly identified;
- both parties understand the issues;
- relevant evidence has been gathered;
- informal discussions have failed;
- a formal complaint has not resolved the matter.
For many civil disputes, ADR is considered after a Letter Before Claim has been sent but before court proceedings are issued.
It can also be used after a claim has started if both parties believe settlement remains possible.
The earlier ADR is considered, the greater the opportunity to avoid unnecessary costs and delay.
Preparing for ADR
Good preparation can make ADR significantly more effective.
Before taking part, it is sensible to:
- understand the issues in dispute;
- gather the relevant documents;
- identify the outcome you would like to achieve;
- consider what compromises you may be prepared to make;
- understand the strengths and weaknesses of your own position.
Approaching ADR with an open mind does not mean abandoning your legal rights. It simply means being willing to explore whether an acceptable solution can be reached.
Gather Your Documents
Whether you are attending mediation, arbitration or another ADR process, having the relevant documents available will usually make discussions more productive.
Depending on the dispute, these may include:
- contracts;
- quotations;
- invoices;
- receipts;
- emails;
- letters;
- photographs;
- inspection reports;
- witness statements;
- records of previous negotiations.
Organising these documents in date order often makes it easier to explain the background to the dispute.
Understand Your Objectives
Before any ADR process begins, ask yourself:
- What outcome would resolve this dispute?
- What am I hoping to achieve?
- Which issues are most important?
- Where might I be willing to compromise?
For example, in a consumer dispute you may initially seek a full refund but be prepared to accept a replacement product if it resolves the matter quickly.
Having realistic objectives often makes negotiations more productive.
Be Prepared to Listen
ADR is not simply an opportunity to repeat your own position.
It also provides an opportunity to understand the other party’s perspective.
Sometimes disputes continue because:
- important information has not been shared;
- misunderstandings have developed;
- assumptions have been made;
- communication has broken down.
Listening carefully can sometimes reveal practical solutions that neither party had previously considered.
Confidentiality
Many forms of ADR, particularly mediation, are conducted on a confidential basis.
This encourages open and honest discussion because the parties can explore possible settlements without immediately committing themselves.
Confidentiality can help create an environment where practical solutions are more likely to emerge.
The extent of confidentiality will depend on the particular ADR process and any agreement between the parties.
What Does ADR Cost?
The cost of ADR varies considerably.
Factors that may influence the cost include:
- the type of ADR used;
- the complexity of the dispute;
- the amount of preparation required;
- the length of the process;
- whether specialist expertise is needed.
In some situations, ADR may involve only modest costs.
In others, particularly commercial disputes, the costs may be significantly higher.
Even so, ADR is often less expensive than fully contested court proceedings.
Who Pays for ADR?
There is no universal rule.
The parties may agree to:
- share the costs equally;
- each pay their own expenses;
- adopt another agreed arrangement.
The appropriate approach will depend on the circumstances and the particular ADR process being used.
Discussing costs at an early stage can help avoid misunderstandings later.
Do You Need a Solicitor?
Not necessarily.
Many people participate in ADR without legal representation.
However, depending on the complexity of the dispute, some parties choose to obtain legal advice before or during the process.
Professional assistance may help you:
- understand your legal position;
- assess any proposed settlement;
- prepare supporting documents;
- understand the implications of any agreement reached.
Whether this is appropriate depends on the nature of the dispute.
What Happens During Mediation?
Although every mediation is different, the process often follows a similar pattern.
The mediator will usually:
- explain the procedure;
- outline the ground rules;
- allow each party to explain their position;
- identify the issues in dispute;
- encourage discussion;
- explore possible settlement options.
The mediator does not decide who is right.
Instead, they help the parties communicate more effectively and work towards a mutually acceptable solution.
Should You Compromise?
Compromise is often part of successful ADR.
However, this does not mean accepting an unfair outcome.
Instead, it involves considering whether a practical settlement is preferable to the uncertainty, cost and delay of court proceedings.
Every settlement involves balancing:
- legal risk;
- financial considerations;
- time;
- stress;
- the likelihood of success at trial.
Only you can decide whether a proposed settlement is acceptable.
What If the Other Party Refuses ADR?
Not every party will agree to participate.
Sometimes a person or business may refuse because they believe:
- their position is correct;
- settlement is unlikely;
- court proceedings are inevitable.
A refusal to engage in ADR does not automatically determine the outcome of any later court proceedings.
However, courts generally expect parties to give reasonable consideration to resolving disputes without litigation where appropriate.
Whether a refusal is reasonable will depend on the facts of the particular case.
What Happens if ADR Fails?
Not every dispute can be resolved through ADR.
If no agreement is reached, the parties remain free to consider their remaining options.
These may include:
- continuing negotiations;
- obtaining additional evidence;
- sending further correspondence;
- issuing court proceedings;
- defending any claim that has already been issued.
Although ADR may not resolve every dispute, it often helps narrow the issues, making any later court proceedings more focused and efficient.
Does ADR Delay Court Proceedings?
Not necessarily.
In many cases, ADR actually saves time because disputes are resolved without the need for lengthy litigation.
Even where settlement is not achieved, the discussions may clarify the issues and reduce the amount of time required if the matter proceeds to court.
For this reason, ADR is often viewed as an investment in resolving disputes efficiently rather than an unnecessary delay.
ADR and the Court Process
ADR should not be viewed as separate from the civil justice system.
Instead, it forms part of the wider approach to dispute resolution in England and Wales.
A typical progression may look like this:
- A dispute arises.
- The parties discuss the issue.
- A formal complaint is made.
- A Letter Before Claim is sent.
- ADR is considered.
- Court proceedings are issued only if necessary.
This approach encourages parties to resolve disputes at the earliest appropriate stage while ensuring that access to the courts remains available where agreement cannot be reached.
Keeping an Open Mind
Perhaps the most important aspect of ADR is attitude.
Approaching the process with a genuine willingness to explore solutions does not weaken your position.
Instead, it demonstrates that your objective is to resolve the dispute fairly and proportionately.
Even where agreement is not reached, ADR often provides a better understanding of the issues and may make any subsequent court proceedings more straightforward.
Practical Examples
The following examples illustrate how Alternative Dispute Resolution may be used in different types of disputes.
Every case is different, but they demonstrate how ADR can help parties resolve disagreements without the need for a full court hearing.
Example 1 – Faulty Kitchen Installation
A homeowner hires a company to install a new kitchen.
After completion, several cupboards are poorly aligned and worktops are damaged.
The homeowner:
- raises a formal complaint;
- provides photographs of the defects;
- obtains an independent inspection report;
- sends a Letter Before Claim.
Before court proceedings begin, both parties agree to mediation.
During the mediation, the installer agrees to replace the damaged worktops and pay a contribution towards the homeowner’s additional costs.
The dispute is resolved without court proceedings.
Example 2 – Unpaid Invoice
A self-employed graphic designer completes work for a local business.
Despite repeated reminders, payment is not received.
The designer sends a Letter Before Claim inviting the business to discuss settlement through mediation.
The business accepts.
During mediation, both parties agree that payment will be made in three monthly instalments.
The agreement avoids the cost and delay of issuing a County Court claim.
Example 3 – Neighbour Dispute
Two neighbours disagree about the position of a boundary fence.
Communication has broken down and both believe they are correct.
Rather than immediately applying to the court, they attend community mediation.
With the mediator’s assistance, they agree a practical compromise regarding the boundary and future maintenance responsibilities.
The dispute ends without damaging their long-term relationship.
Frequently Asked Questions
What does ADR stand for?
ADR stands for Alternative Dispute Resolution.
It describes various methods of resolving disputes without asking a court to determine the outcome.
Is ADR legally binding?
It depends on the type of ADR.
Some processes, such as arbitration, commonly result in binding decisions.
Others, such as mediation, only become binding if the parties reach and record an agreement.
Do I have to use ADR?
Not always.
Whether ADR is appropriate depends on the nature of the dispute.
However, courts generally expect parties to give reasonable consideration to ADR before pursuing litigation where appropriate.
Is mediation better than going to court?
There is no universal answer.
Mediation is often quicker, less formal and less expensive.
However, if the parties cannot agree, court proceedings may still be necessary.
Can ADR save money?
Often, yes.
Although ADR may involve costs, it can be considerably less expensive than contested court proceedings.
How long does mediation take?
Many mediations are completed within a single day.
Some simpler disputes may be resolved in just a few hours, while more complex matters may require additional sessions.
Can I attend ADR without a solicitor?
Yes.
Many people take part in ADR without legal representation.
Whether professional assistance is appropriate depends on the complexity of the dispute.
What if the other party refuses mediation?
You cannot usually force someone to participate in mediation.
However, if court proceedings later become necessary, the court may take the parties’ conduct into account when considering the overall management of the case.
Can ADR be used after court proceedings have started?
Yes.
Settlement discussions and ADR can take place before, during or even shortly before a final hearing.
Many disputes settle after proceedings have already been issued.
Is everything said during mediation confidential?
Mediation is generally conducted on a confidential basis.
The precise extent of confidentiality depends on the terms agreed between the parties and the nature of the process.
Can businesses use ADR?
Yes.
ADR is widely used by businesses of all sizes to resolve commercial disputes efficiently.
Is ADR suitable for consumer disputes?
Often, yes.
Consumer disputes are among the most common types of disagreements resolved through negotiation, mediation and ombudsman schemes.
What is an ombudsman?
An ombudsman is an independent body that investigates complaints in particular sectors and, where appropriate, makes decisions under the rules of the relevant scheme.
What is arbitration?
Arbitration is a form of ADR in which an independent arbitrator considers the evidence and reaches a decision.
Depending on the circumstances, that decision may be legally binding.
Can ADR preserve business relationships?
Yes.
One of the main advantages of ADR is that it encourages constructive discussion, making it easier for parties to continue working together after the dispute has been resolved.
What happens if ADR is unsuccessful?
If no agreement is reached, the parties may continue negotiations or commence court proceedings where appropriate.
Attempting ADR does not usually prevent you from pursuing your legal rights.
Should I prepare evidence before ADR?
Yes.
Having organised documents and supporting evidence can help both parties understand the issues and make discussions more productive.
Can I negotiate directly instead of using mediation?
Yes.
Direct negotiation is one of the simplest forms of Alternative Dispute Resolution and often resolves disputes without the need for a formal process.
Is ADR available for small claims?
Yes.
ADR is frequently used in disputes that may otherwise proceed through the Small Claims Track.
In many cases, settlement is achieved before a hearing becomes necessary.
Is ADR always the right option?
No.
Some disputes require urgent court intervention or involve legal issues that cannot realistically be resolved through negotiation.
Each case should be considered on its own circumstances.
How Impel Legal Can Help
Resolving a dispute is not always about going to court.
In many situations, careful preparation, clear communication and a willingness to explore Alternative Dispute Resolution can achieve a quicker and more cost-effective outcome.
At Impel Legal, we can assist by:
- explaining the different forms of ADR;
- helping you assess whether ADR may be appropriate for your dispute;
- preparing Letters Before Claim;
- organising supporting documents and evidence;
- assisting with settlement discussions;
- preparing documentation if court proceedings become necessary.
Our aim is to help clients understand their options and approach dispute resolution with confidence.
Related Guides
You may also find these guides helpful:
- Letter Before Claim: A Complete Guide
- Preparing Evidence for Court
- The Small Claims Court Explained
- Consumer Rights in England & Wales
- Faulty Goods: Refunds, Repairs and Replacements
- Witness Statements: A Complete Guide
- Money Claim Online Explained (
- Enforcing a County Court Judgment
Conclusion
Alternative Dispute Resolution plays an important role in the civil justice system in England and Wales.
Whether through negotiation, mediation, arbitration or another form of ADR, many disputes can be resolved more quickly, less formally and at a lower cost than traditional court proceedings.
While ADR is not suitable for every case, understanding the available options can help you make informed decisions about how best to resolve a dispute.
Where agreement cannot be reached, court proceedings remain available. However, exploring ADR first may save considerable time, expense and stress while demonstrating a constructive approach to resolving the issues.
By understanding how ADR works and preparing carefully, you place yourself in the best possible position to achieve a fair and practical outcome.
Disclaimer
This guide provides general information about Alternative Dispute Resolution in England and Wales at the time of publication. It is intended for educational purposes only and does not constitute legal advice. Every dispute depends on its own facts and circumstances. If you require assistance with a specific matter, you should seek appropriate legal support.